4 ms·

Because democratically, the foreign debt-relation makes the whole difference. If all of the greek debt had been domestic, then a restructuring would have been a

by biehl 12y ago

Because democratically, the foreign debt-relation makes the whole difference. If all of the greek debt had been domestic, then a restructuring would have been a purely domestic matter - solvable by a democratic election. What is ugly is when foreign states impose non-sensical demands of another country as part of a move to bail out their own banks.

NotableAlamode 12y ago
I'm not sure I see your point. Greece has a perfectly democratic way of getting rid of its debt: default. Russia in 1998 was the last big European country to do so. Iceland's banks also defaulted on some wholesale depositors a few years ago. Greece has (partly or fully) defaulted on foreign debt already on several occasions in the past. Greece has in effect already defaulted on some of its current debt, although it is not always called a default. Moreover Greece is getting extremely favourable interest rates and repayment schedules on its remaining debt. The real question is: why is Greece not going the democratic way of defaulting on its external debt? And the answer is, as you know well, that Greece wants to continue receiving all that sweet EU money. Why stop a good thing? ... impose non-sensical demands ... Have you considered that not everybody thinks that fighting corruption, tax-avoidance etc is non-sensical?
- ptaipale 12y ago
  Agreed. However, once again, we should not compare directly solutions of Iceland (banks) and Greece (government), because the problems are quite different. Iceland (the country, the government) was not in much debt and did not default. Icelandic banks did default and went bankrupt. The banks (Kaupthing, Glitnir and Landsbank) were split so that Icelandic debts and assets were moved into new surviving publicly owned domestic versions of the banks, and the foreign remnants of the banks were placed into receivership and liquidation. Russia, the country, actually defaulted. Russia is today not known as a safe place for investments (though the history of a default is just a small part there; in Russia's assets, it has huge energy reserves, and in its liabilities, it has kleptocracy, corruption and an arbitrary justice system).
  - NotableAlamode 12y ago
    Sure, but it's a tried and tested way of getting rid of one's debt. Many (most?) countries have used it in the past, see [1], including the USA. [1] https://en.wikipedia.org/wiki/Sovereign_default#List_of_sovereign_debt_defaults_or_debt_restructuring https://en.wikipedia.org/wiki/Sovereign_default#List_of_sove...

by biehl 12y ago

NotableAlamode 12y ago

I'm not sure I see your point. Greece has a perfectly democratic way of getting rid of its debt: default. Russia in 1998 was the last big European country to do so. Iceland's banks also defaulted on some wholesale depositors a few years ago. Greece has (partly or fully) defaulted on foreign debt already on several occasions in the past. Greece has in effect already defaulted on some of its current debt, although it is not always called a default. Moreover Greece is getting extremely favourable interest rates and repayment schedules on its remaining debt. The real question is: why is Greece not going the democratic way of defaulting on its external debt? And the answer is, as you know well, that Greece wants to continue receiving all that sweet EU money. Why stop a good thing? ... impose non-sensical demands ... Have you considered that not everybody thinks that fighting corruption, tax-avoidance etc is non-sensical?

ptaipale 12y ago
Agreed. However, once again, we should not compare directly solutions of Iceland (banks) and Greece (government), because the problems are quite different. Iceland (the country, the government) was not in much debt and did not default. Icelandic banks did default and went bankrupt. The banks (Kaupthing, Glitnir and Landsbank) were split so that Icelandic debts and assets were moved into new surviving publicly owned domestic versions of the banks, and the foreign remnants of the banks were placed into receivership and liquidation. Russia, the country, actually defaulted. Russia is today not known as a safe place for investments (though the history of a default is just a small part there; in Russia's assets, it has huge energy reserves, and in its liabilities, it has kleptocracy, corruption and an arbitrary justice system).
- NotableAlamode 12y ago
  Sure, but it's a tried and tested way of getting rid of one's debt. Many (most?) countries have used it in the past, see [1], including the USA. [1] https://en.wikipedia.org/wiki/Sovereign_default#List_of_sovereign_debt_defaults_or_debt_restructuring https://en.wikipedia.org/wiki/Sovereign_default#List_of_sove...